Clifford Chance’s decision to close its Seoul office is not necessarily a surprise since the Magic Circle firm had had no resident partner in the city for some time but it may also be indicative of a wider trend of global firms reducing their Asia footprints. Upon liberalisation of the South Korean market in 2012 a flurry of international openings occurred as firms dashed to secure teams and partners to establish footholds in the market but, as was previously the case in Singapore, the market is divided between foreign and local firms and remains dominated by the larger native entities. Simpson Thacher & Bartlett and McDermott Will & Emery also shuttered their Seoul offices in 2018 and 2019 respectively, although Dentons continued to expand their international network by merging with local firm Lee International IP & Group to form Dentons Lee in 2020, a move which bridges the gap between the local and foreign firm markets.
Clifford Chance also withdrew from Jakarta and Bangkok in recent years, seeing more value in consolidating their South East Asia practices in Singapore, and a widely acknowledged effect of the pandemic has been firms having to adapt to servicing clients remotely where necessary. As they have become more successful at this, and as the global economy suffered, it’s no surprise to see firms looking at their second-largest outgoing (rent) more acutely and seeing where savings can be made. All three firms that have left Seoul publicly stated that they remain committed to the market but feel they can comfortably cover what is required from further afield.
As the world opens up again it will be interesting to see how firms adjust their international strategies. Although the world has become smaller due to advancing technologies and ease of travel, it is still invaluable to have a physical presence in a core market. But some firms are seeing less value in having multiple regional offices, especially where rents are high, there is fierce competition for local talent, and deal flow and fees are unpredictable. If larger firms feel that the margins are becoming too squeezed in such markets, this gives smaller firms with more flexible fee structures opportunities to carve their own spaces, perhaps in specific niche practice areas that ordinarily pass under the radars of the global behemoths. With exceptions, the biggest firms seem to remain ambivalent about putting offices in, for example, Thailand, Vietnam, Cambodia and Taiwan, leaving the door open to smaller firms that may only enjoy second- or third-tier status in established markets such as Hong Kong and Singapore but could quickly establish themselves as market leaders in those jurisdictions.